The present research has been undertaken with the aim to develop a topical gel of diclofenac sodium gel (DS) 1%, evaluation of its physico chemical characteristics. The main objective of this research paper is to prepare and evaluate 1% polymer containing transdermal gel of Diclofenac Sodium. The gel was prepared and evaluated for pH, Spreadability, Consistancy, Homogeneity, Drug Content, Skin Irritation test and In vitro Diffusion Study. The carbopol is high molecular weight water soluble homo polymer ehich posses high viscoty in low concentrations, transparency, and film Forming properties these are useful for gel formation. The percentage of drug release was 97.68%. In vitro drug release was evaluated by using Inhibition of protein denaturation. The diclofenac sodium was subjected to in vitro inhibition of protein denaturation in various concentrations i.e. 100, 200, 400, 800, 1000 µg/ml. The present study suggests that the Diclofenac sodium effectively act as in vitro anti-inflammatory activity.